ServiceNow, Inc. reported a significant increase in financial performance for the first quarter of 2026, with total revenues reaching $3.77 billion, a 22% increase from $3.09 billion in the same period last year. Subscription revenues, which constitute the bulk of the company's income, rose to $3.67 billion, up from $3.01 billion, driven by increased purchases from both new and existing customers. The company's net income for the quarter was $469 million, slightly up from $460 million in the prior year, resulting in a diluted earnings per share of $0.45, compared to $0.44 a year earlier.
In terms of operational metrics, ServiceNow's remaining performance obligations (RPO) stood at $27.7 billion as of March 31, 2026, reflecting a 25% increase year-over-year. The number of customers with an annual contract value exceeding $5 million also grew to 630, up from 516 in the previous year. The company’s cash and cash equivalents decreased to $2.70 billion from $3.73 billion at the end of 2025, primarily due to increased investments and stock repurchases.
Strategically, ServiceNow made notable acquisitions, including the purchase of Veza Technologies for approximately $1.2 billion, aimed at enhancing its security and risk portfolios. The company also completed other smaller acquisitions during the quarter. Additionally, ServiceNow's board authorized a $5 billion increase to its share repurchase program, reflecting its commitment to returning value to shareholders. During the quarter, the company repurchased 20.1 million shares at an average price of $107.97 per share.
The company’s operating expenses increased to $2.33 billion, up from $1.99 billion, driven by higher costs in sales and marketing, research and development, and general administrative expenses. The gross profit margin for subscription services decreased to 78% from 81%, attributed to rising costs associated with customer support and data center operations. Despite these increases, ServiceNow expects continued growth in subscription revenues and overall business performance for the remainder of 2026.
Looking ahead, ServiceNow anticipates that subscription revenues will continue to grow in absolute terms, although the percentage of total revenue may stabilize. The company remains focused on expanding its customer base and enhancing product offerings, while also managing costs associated with its growth strategy. The outlook reflects confidence in the company's ability to navigate macroeconomic challenges and capitalize on opportunities in the digital transformation space.
About ServiceNow, Inc.
ServiceNow, Inc. provides a cloud-based platform that automates and digitizes enterprise workflows across IT, customer service, HR, security, and industry-specific functions. Its Now Platform leverages AI, including Generative AI, to enhance productivity, streamline processes, and improve user experiences. Serving large enterprises worldwide, the company offers scalable, flexible solutions that connect systems, data, and people to drive digital transformation and operational efficiency.
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